How it Works
The main purpose of a Voluntary Administration is to provide a company with a viable alternative to winding up by restructuring its financial affairs. Sometimes however a Voluntary Administration may also be considered where there are other concerns such as the maximisation of the asset values of a company. This typically occurs in circumstances where any unreasonable delay will result in a significant reduction of the asset values, thereby impacting the return to creditors.
Deed of Company Arrangement
The purpose of a Deed of Company Arrangement is to formalise a proposal made by the directors during the Voluntary Administration, which has been ratified by creditors. A Deed of Company Arrangement is a legally binding document between the company, its creditors and the Administrator.
Jones Partners have acted as Deed Administrator for many companies where we have worked with the company to see business profitability restored and creditors receiving substantially more than they would have otherwise received.
Creditors Voluntary Liquidation
This approach consists of winding up the affairs of the company where the directors and shareholders have determined that due to the insolvency of the business they no longer wish to continue trading. A Creditors Voluntary Liquidation may also eventuate where a company has been placed into Voluntary Administration and a proposal for a Deed of Company Arrangement has not been accepted by creditors.
Michael Jones, Bruce Gleeson, David Shannon and Daniel Soire are Registered Liquidators and can carefully evaluate whether voluntary liquidation is the “right option” in the circumstances.
The financial affairs of an insolvent company are wound up by way of an application to the Court. The most common reason why a company is wound up by the Court is because it has failed to comply with the demands of an unsecured creditor.
Michael Jones, Bruce Gleeson, David Shannon and Daniel Soire are Official Liquidators and regularly appointed to these types of external administrations.
This special form of Court appointed Liquidator is typically used in instances where there is an urgency or concern for the protection of company assets. It may not be necessary for the company to be wound up because it is insolvent. Although in frequent, it is also possible for the company to be returned to the directors’ care. The appointment is usually made on the application of a creditor, shareholder or director.
A Receiver (or Receiver and Manager, Controller or Agent for the Mortgagee) is usually appointed to recover funds owing to a secured creditor such as a bank or other financier. A Receiver can also be appointed by the Court in special circumstances. The appointment is actioned by the secured creditor pursuant to the provisions of its charge or mortgage document.
A Receiver can either continue to trade-on the business or realise some or all of the company’s assets to repay the secured creditor depending on the nature of their appointment.
So call us now on +61 2 9251 5222 or click here to arrange an obligation free discussion and we’ll help fast-track an assessment of your position and the “right options”.
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Helping individuals, directors and business owners effectively deal with financial distress and a focus on the future.
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